The department store chain has been found to have failed to pay £134,894.83 to some 11,858 workers in a move that will heighten tensions around retailers and the rising costs of the living wage, reports The Telegraph.
The Government introduced its naming and shaming scheme in 2013 and so far more than 1,000 employers have been named for underpaying staff more than £4.5m in total. There are a further 1,500 cases which HM Revenue and Customs is investigating.
Excuses for underpaying workers have included making staff pay for their own uniforms out of their salary and docking workers’ wages to pay for their Christmas party.
Debenhams blamed the case on a “technical error in its payroll calculations” and said the mistake had led to an average underpayment of around £10 per person which had been paid immediately after an HMRC audit discovered the problem.
A spokesman added: “As a responsible employer Debenhams is committed to the National Minimum Wage, and as soon as the error was identified by a routine HMRC audit last year, we reimbursed all those affected. We have apologised to all our colleagues affected and have taken steps to ensure it cannot happen again.”
The new national living wage was introduced last April which requires employers to pay at least £7.20 an hour to employees aged 25 and over. The minimum hour wage of £6.70 applies to workers between 21 and 24, with lower rates for younger people and apprentices.
Separately, upmarket hotel chain Q Hotels Services Limited was named and shamed for failing to pay £4,579.79 to one worker, despite donating £3,000 to Yvette Cooper’s local Labour party in 2015 and £5,000 to Ed Miliband in 2010. Luxury hotel chain Hogarths also failed to pay £1,104.94 to one worker despite donating £2,000 to the Liberal Democrats in 2015.
Margot James, Business minister said: “Every worker in the UK is entitled to at least the national minimum or living wage and this government will ensure they get it.
“That is why we have named and shamed more than 350 employers who failed to pay the legal minimum, sending the clear message to employers that minimum wage abuses will not go unpunished”, she added.
Other high-profile companies to have been named and shamed in the past include Monsoon Accessorize and football clubs Brighton and Hove Albion and Blackpool FC.
Meanwhile, the head of a Government review into working practices has said that he wanted companies to improve the quality of jobs and said that there was an increasing ambiguity over whether staff were workers or self-employed.
Matthew Taylor, chief executive of the Royal Society for the encouragement of Arts, Manufacturers and Commerce, said that people were choosing “self-employment but it can be a way to avoid responsibility for paying tax”.
The Independent Workers’ Union of Great Britain (IGWB) trade union has also argued that the rising so-called “gig-economy is little more than a euphemism for low-paid insecure work.” The gig-economy means that instead of a regular wage, workers are paid for the gigs they do – whether delivering food as a Deliveroo courier or driving a car as an Uber driver.
In the UK it’s estimated that five million people are employed in this capacity.
“Workers are often constrained to sign contracts which do not reflect the legal reality of their employment status and as such result in depriving them of the basic employment rights to which they should be entitled,” said the IWGB in a submission to the Government.
